Insights

CMS Announced New RAC for Home Health & Hospice Agencies

Posted on Thursday, December 15, 2016 9:33 PM

Providers can now expect post-payment reviews by Performant Recovery, Inc. to be the newest recovery audit contractor (RAC) for home health agencies and hospices.

On October 31, CMS announced that Performant will be the first RAC dedicated to home health, hospice and durable medical equipment (HHL 11/7/16).

Performant’s reviews are expected to begin next month; a CMS spokesman says.

Agencies and hospices must be on guard because they now have a RAC focused exclusively on them, says Mary Carr, Vice President for Regulatory Affairs with the National Association for Home Care & Hospice.

One thing to bear in mind is that even though Performant has a new RAC contract, it is experienced in performing RAC audits of home health agencies, says home health attorney Heidi Kocher in the Dallas office of Liles Parker.

There isn’t going to be a ramp-up in terms of Performant hiring staff, training them and becoming familiar with documentation,” Kocher warns.

Performant’s new RAC contract entitles it to a 17.46% of the overpayments it identifies — “a pretty significant incentive to deny claims,” Kocher believes.

In the 2015 fiscal year, RACs nationwide had $440 million in corrections in overpayments and underpayments combined. That’s according to CMS’ FY 2015 Report to Congress, which was posted December 7.

For the 2014 fiscal year, RACs corrected nearly $2.6 billion.

The significant decrease in corrections nationwide from RACs is largely attributable “to the prohibition on the RACs from performing patient status reviews” last year.

But now that RACs are starting up again, they’re expected to collect significantly more in the next 12 months, industry experts contend.

In the 2015 fiscal year, Performant ranked third among the four RACs with nearly $91 million in total corrections.

Although Performant collected about $57 million less than fellow RAC Connolly, it examined more than 247,000 claims.

Performant’s improper payment identification rate was 10.9%. The average rate for RACs was 17.9%.

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